NEW YORK - (Mealey's) Liquidation trustee for Bernard L. Madoff Investment Securities LLC (BLMIS) Irving H. Picard and 30 investment funds and affiliates of money management company Tremont Group Holdings Inc. have agreed to settle claims associated with the defendants' participation in Madoff's multibillion dollar Ponzi scheme for more than $1 billion, according to a motion filed in New York federal bankruptcy court on July 28 (Securities Investor Protection Corp. v. Bernard L. Madoff Investment Securities LLC, No. 08-1789, [In re: Bernard L. Madoff Investment Securities LLC (Irving H. Picard v. Tremont Group Holdings, Inc., et al.), No. 10-5310], S.D. N.Y. Bkcy.).
As part of the settlement, which is subject to court approval, the defendants will pay more than $1 billion in cash payments to settle all claims against them. The payments will be placed into escrow and, ultimately, in the BLMIS customer fund.
Picard filed his complaint against the defendants in the U.S. Bankruptcy Court for the Southern District of New York. He alleged that the defendants collected more than $2.1 billion in avoidable transfers while acting as a feeder fund to BLMIS.
Picard stated 21 claims for relief under the Bankruptcy Code and New York law, including claims for preferential transfers, fraudulent transfers, recovery of the transfers, recovery of subsequent transfers, disallowance of defendants' Securities Investor Protection Act claims, equitable subordination of customer claims and unjust enrichment.
Madoff pleaded guilty to 11 counts of felony counts on in March 2009 in connection with his operation of an estimated $65 billion Ponzi scheme. He was sentenced to 150 years in prison and is currently serving his prison sentence in the federal prison system.
[Editor's Note: Full coverage will be in the August issue of Mealey's Emerging Securities Litigation. In the meantime, the motion for entry of order approving settlement agreement is available at www.mealeysonline.com or by calling the Customer Support Department at 1-800-833-9844. Document #57-110808-013B. For all of your legal news needs, please visit www.lexisnexis.com/mealeys.]
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